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fter implementing subsidy reforms by adjusting fuel prices several times, the government submitted the draft of the revised 2015 State Budget to the House of Representatives, with immediate approval likely. All factions in the House have indicated that they will support the revised 2015 budget.

The revised budget shows that President Joko '€œJokowi'€ Widodo is determined to make good his campaign promises on implementing subsidy reform by cutting wasteful fuel subsidies, increasing spending for infrastructure and mobilizing tax revenues.

His plan for subsidy reforms went smoothly. The sharp fall in oil prices, from over US$100 last June to below $50 per barrel currently, has offered President Jokowi a window of opportunity to strengthen the nation'€™s fiscal position. Even after the government reduced gasoline and diesel prices on Jan. 19, the government will still gain a huge saving in fuel subsidies.

In the revised 2015 budget, fuel subsidies are projected at Rp 82 trillion ($6.5 billion), one third of the amount spent in 2014. With around Rp 217 trillion in additional funds, President Jokowi can start building the infrastructure the absence of which has been hampering the potential growth of the economy.

Capital expenditure, mostly for infrastructure, has been earmarked at Rp 282.4 trillion, or 52 percent higher than in the 2014 budget. And it is nearly three and a half times as much as the fuel subsidies, a drastic reversal from past spending patterns.

But the more daunting task for President Jokowi is mobilizing government revenues to meet the projected expenditure. In the revised 2015 budget, the government has set an ambitious target for tax revenues.

The target is set at Rp 1.48 quadrillion, a 20 percent increase from 2014 and 12.5 percent of GDP.

This is a tall order for the government, since the growth in tax revenue was well below 20 percent for the last three years.

But in his campaign, Jokowi said he would strive to increase tax revenue to 16 percent of GDP by 2019, compared with only 11.5 percent in 2014. But how can he achieve this? Broadening the tax base is the most logical step, but the result would be long-term. So the government strategy for now is apparently to enforce compliance from existing taxpayers.

The level of compliance from taxpayers is low: only 50 percent of listed income-taxpayers actually pay taxes. Officials from the directorate general of taxation are now starting to hunt big corporate taxpayers who have not fully complied with their tax payment obligations.

But these efforts need a stronger and bigger organization within the directorate, a goal that up to now has not been achieved.

The success of tax revenue mobilization is the most critical element in the implementation of the 2015 budget. The increase in tax revenue should more than offset the sharp decline in non-tax revenues '€” mainly revenues from natural resources- that this year is projected to fall sharply by more than Rp 100 trillion to Rp 281 trillion.

Failure to achieve tax revenue targets would pose a risk for the building of infrastructure projects and other social programs on which the President has staked his own credibility.

But if all of the programs are to be completed according to the plans, the government will be forced to seek more debt to cover higher deficits.

Mobilizing tax revenue is easier in an environment of stronger growth, and this could be achieved through good coordination with Bank Indonesia (BI), the central bank. The tight monetary policies conducted by BI for the last two years have significantly dampened monetary growth. Bank-loan growth fell from 22 percent in 2013 to 12 percent in 2014. But growth of currency in circulation fell dramatically from 13.6 percent in 2013 to only 5.6 percent in 2014.

This is the first time in several years that growth of money in circulation fell to below growth in nominal GDP. This shows that although changes in the BI benchmark rate were modest, the effect on monetary tightening was very pronounced.

Would BI help President Jokowi by facilitating economic growth through changes to its monetary policies? Unfortunately not, because despite lower inflation expectations from the sharp fall of oil prices, BI would not consider loosening its monetary stance as long as volatilities in global financial market pose a risk to Indonesian macroeconomic stability.

Slower global economic growth than anticipated will pose a downside risk for the economy. This is largely due to the still-weak growth of world trade. According to the World Bank, world trade grew at only 4 percent annually in 2012-2014. This was well below the average of 7 percent growth before the crisis in 2008-2009.

The slowdown in global trade has been driven by cyclical factors, notably the persistently weak demand from high-income countries and structural factors including the changing relationship between trade and income. World trade has been less responsive to changes in income and according to the World Bank, this is because of slower progress in the global supply chain and the shift toward demand for less import-intensive items.

Under these conditions, it is difficult for Indonesia to expect export recovery in 2015 and at best, exports will be stagnant in 2015. Up to November 2014, total exports of ten commodities representing 53 percent of Indonesian non-oil and gas exports were down 4 percent from the same period in 2013.

Over the same period, exports to China, the biggest Indonesian export destination, dropped significantly by 20 percent to $15.1 billion. As China'€™s economy is struggling to maintain its current growth level, its import demand from Indonesia will remain weak.

As exports to China are mostly commodities, a fall in commodity prices could have a significant impact on the Indonesian economy.

The only bright spot is exports to non-traditional countries, those outside the main 13 export destination countries. Despite growth slowdown in the world economy, exports to these countries grew by a healthy 8.3 percent up to November 2014. But its export value was only 32 percent of the total non-oil and gas exports.

In his campaign, Jokowi said he would instruct Indonesian ambassadors to also serve as marketing men for Indonesian products abroad. As a first step, he should instruct the ambassadors to these countries to do just that, and see what effect it has.

The growth target of 5.8 percent will require substantial investment and imports.

The fall in oil prices will lessen the pressure on the current accounts, but the volume of oil consumption could increase if the gap between domestic oil production and consumption keeps widening, so that its impact on the trade balance is more than offset by higher capital imports.

So with the need for investment and imports soaring, and with exports remaining weak, a wide current account deficit could persist in the coming years.

This could be a good seed for volatilities in capital flows and the exchange rate when the Indonesian economy is already facing headwinds from global market volatilities and weak global growth.